• by Emily Burg , June 19, 2007

Sony is pulling the plug on its online music store Sony Connect. Unable to compete with Apple's iTunes store, and having struggled to gain market share due to its insistence upon using a custom security-protected ATRAC music format for its downloads, the music part of the store is shutting down. An eBooks section of Connect will remain in business, as sale of that online content is necessary to service the Sony Reader.

Sony is not commenting on the reported move, which is the outgrowth of a recent company meeting at which Sony decided to move the remaining employees of Connect to its PlayStation division where it has had significantly more success. Division head Steve Banfield will depart his position in the coming weeks. It has not been determined what Sony will do with the Connect brand once the transition takes place.

The Connect news follows a crushing blow to Sony on its home turf. Yahoo Japan and Apple announced that iTunes will replace Mora, a Sony-affiliate music download service, as the default music store on Yahoo Music Japan, which reaches 84% of the country's Internet users.

The decision to shutter Connect is an about-face for Sony, which has been bold in its pronouncements to leverage its stake in filmed entertainment properties online.

At the end of last year Sony announced plans to launch an online movie store that would offer Sony movie titles for download sooner than Apple's iTunes store would, but then that move was trumped by the robust movie offerings that iTunes made swiftly available in 2007, enabled via partnerships with several movie studios.

Sony also planned to allow direct transfers of downloaded movies to Walkman players to save computer hard disk space--something that has yet to materialize.

Sony has moved outside its own online properties to offer ad-supported 'minisodes' of classic TV shows like "Charlie's Angels" and "TJ Hooker" from its Sony Pictures Television production studio for viewing on MySpace.

When announced in May, the company said the project came partly as a response to the popularity of snippets on Web sites like YouTube and also for the desire to "make [legitimate] money from our library," said Steve Mosko, president of Sony TV. "There are no expensive costs. It's just editing. Our people are really having fun with this."

Depending on their success, Sony said it may consider rolling out an entire 'Minisode Network' for the Web.